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Parents Pricing Home NSC Accounting Asset register 4.1 Choose a description from COLUMN B that matches the term in COLUMN A
4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1 Question 4
View full question 4.1 Choose a description from COLUMN B that matches the term in COLUMN A. Write only the letter (A–D) next to the question number (4.1.1–4.1.4) in the ANSWER BOOK, f... show full transcript
View marking scheme Worked Solution & Example Answer:4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1
4.2.1 Carrying value of the vehicle sold on 30 November 2016 Only available for registered users.
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To determine the carrying value of the vehicle sold on 30 November 2016, we need to calculate its accumulated depreciation until the date of sale. Given:
Cost price: R190,000
Accumulated depreciation (as of 1 March 2016): R72,000
Depreciation rate: 20% per annum on cost
The number of months from 1 March 2016 to 30 November 2016 is 9 months. Therefore, the additional depreciation for this period is:
ext{Depreciation} = ext{Cost} imes ext{Depreciation Rate} imes rac{9}{12} = 190,000 imes 0.20 imes rac{9}{12} = 28,500
Total accumulated depreciation by the date of sale:
e x t T o t a l A c c u m u l a t e d D e p r e c i a t i o n = 72 , 000 + 28 , 500 = 100 , 500 ext{Total Accumulated Depreciation} = 72,000 + 28,500 = 100,500 e x t T o t a l A cc u m u l a t e d De p rec ia t i o n = 72 , 000 + 28 , 500 = 100 , 500 Thus, the carrying value at the time of sale is:
e x t C a r r y i n g V a l u e = e x t C o s t P r i c e − e x t T o t a l A c c u m u l a t e d D e p r e c i a t i o n = 190 , 000 − 100 , 500 = 89 , 500 ext{Carrying Value} = ext{Cost Price} - ext{Total Accumulated Depreciation} = 190,000 - 100,500 = 89,500 e x t C a rry in g Va l u e = e x t C os tP r i ce − e x t T o t a l A cc u m u l a t e d De p rec ia t i o n = 190 , 000 − 100 , 500 = 89 , 500
4.2.1 Total depreciation on 28 February 2017 Only available for registered users.
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To calculate the total depreciation on 28 February 2017, we must consider the following:
Depreciation for the sold vehicle (already calculated above)
Depreciation for remaining vehicles, R138,000
Depreciation for new equipment costing R32,000 at 10% p.a.:
e x t N e w E q u i p m e n t D e p r e c i a t i o n = 32 , 000 i m e s 0.10 = 3 , 200 ext{New Equipment Depreciation} = 32,000 imes 0.10 = 3,200 e x t N e wEq u i p m e n t De p rec ia t i o n = 32 , 000 im es 0.10 = 3 , 200 Total depreciation:
e x t T o t a l D e p r e c i a t i o n = 28 , 500 + 138 , 000 + 3 , 200 = 169 , 700 ext{Total Depreciation} = 28,500 + 138,000 + 3,200 = 169,700 e x t T o t a l De p rec ia t i o n = 28 , 500 + 138 , 000 + 3 , 200 = 169 , 700
4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017 Only available for registered users.
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To prepare the Income Statement, we will summarize the revenue and expenses:
Income Statement for the Year Ended 28 February 2017
Sales: R5,500,000Cost of Sales: R3,150,000
Gross Profit:
e x t G r o s s P r o f i t = e x t S a l e s − e x t C o s t o f S a l e s = 5 , 500 , 000 − 3 , 150 , 000 = 2 , 350 , 000 ext{Gross Profit} = ext{Sales} - ext{Cost of Sales} = 5,500,000 - 3,150,000 = 2,350,000 e x t G ross P ro f i t = e x t S a l es − e x t C os t o f S a l es = 5 , 500 , 000 − 3 , 150 , 000 = 2 , 350 , 000
Other Operating Income:
Rent Income: R169,500
Bad Debt Recovered: R4,750
Total Operating Income:
e x t T o t a l O p e r a t i n g I n c o m e = 2 , 350 , 000 + 169 , 500 + 4 , 750 = 2 , 524 , 250 ext{Total Operating Income} = 2,350,000 + 169,500 + 4,750 = 2,524,250 e x t T o t a lOp er a t in g I n co m e = 2 , 350 , 000 + 169 , 500 + 4 , 750 = 2 , 524 , 250 Operating Expenses:
Directors' Fees: R380,000
Audit Fees: R54,000
Bad Debts: R15,500
Salaries and Wages: R490,250
Consumable Stores: R61,700
Insurance: R19,220
Bank Charges: R7,760
Sundry Expenses: R140,085
Total Depreciation: R169,700
Total Operating Expenses:
e x t T o t a l O p e r a t i n g E x p e n s e s = 380 , 000 + 54 , 000 + 15 , 500 + 490 , 250 + 61 , 700 + 19 , 220 + 7 , 760 + 140 , 085 + 169 , 700 = 1 , 348 , 515 ext{Total Operating Expenses} = 380,000 + 54,000 + 15,500 + 490,250 + 61,700 + 19,220 + 7,760 + 140,085 + 169,700 = 1,348,515 e x t T o t a lOp er a t in g E x p e n ses = 380 , 000 + 54 , 000 + 15 , 500 + 490 , 250 + 61 , 700 + 19 , 220 + 7 , 760 + 140 , 085 + 169 , 700 = 1 , 348 , 515 Operating Profit:
e x t O p e r a t i n g P r o f i t = e x t T o t a l O p e r a t i n g I n c o m e − e x t T o t a l O p e r a t i n g E x p e n s e s = 2 , 524 , 250 − 1 , 348 , 515 = 1 , 175 , 735 ext{Operating Profit} = ext{Total Operating Income} - ext{Total Operating Expenses} = 2,524,250 - 1,348,515 = 1,175,735 e x t Op er a t in g P ro f i t = e x t T o t a lOp er a t in g I n co m e − e x t T o t a lOp er a t in g E x p e n ses = 2 , 524 , 250 − 1 , 348 , 515 = 1 , 175 , 735 Interest Income:
Interest Income (calculated at 28% of the net profit before interest): R1,334,000 * 0.28 = R373,520
Net Profit before Tax:
e x t N e t P r o f i t b e f o r e T a x = e x t O p e r a t i n g P r o f i t + e x t I n t e r e s t I n c o m e = 1 , 175 , 735 + 373 , 520 = 1 , 549 , 255 ext{Net Profit before Tax} = ext{Operating Profit} + ext{Interest Income} = 1,175,735 + 373,520 = 1,549,255 e x t N e tP ro f i t b e f ore T a x = e x t Op er a t in g P ro f i t + e x t I n t eres t I n co m e = 1 , 175 , 735 + 373 , 520 = 1 , 549 , 255 Income Tax:
Net Profit after Tax:
e x t N e t P r o f i t a f t e r T a x = e x t N e t P r o f i t b e f o r e T a x − e x t I n c o m e T a x = 1 , 549 , 255 − 336 , 000 = 1 , 213 , 255 ext{Net Profit after Tax} = ext{Net Profit before Tax} - ext{Income Tax} = 1,549,255 - 336,000 = 1,213,255 e x t N e tP ro f i t a f t er T a x = e x t N e tP ro f i t b e f ore T a x − e x t I n co m e T a x = 1 , 549 , 255 − 336 , 000 = 1 , 213 , 255 Join the NSC students using SimpleStudy...97% of StudentsReport Improved Results
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